Alibaba, one of China’s largest technology companies, has announced a major restructuring in which it will split into six individual business groups. The company’s chairman, Daniel Zhang, has indicated that the restructuring will allow each individual business to pursue its own fundraising and listing plans. The goal of the reorganization is to create shareholder value and promote market competitiveness, the company has said. Each of the new groups will be led by its own CEO and board of directors, except for Taobao Tmall Commerce Group, which will continue to be owned by Alibaba. The restructuring will not affect Alibaba’s listing in New York and Hong Kong.
The announcement of the restructuring has been well received by investors, with a 9% increase in the company’s stock before the opening of the New York Stock Exchange. The Chinese tech industry has been under increased regulation by the Chinese government in recent years, leading to a contraction in the combined revenue of the country’s internet companies in 2022. Alibaba has faced difficulties in this regulatory environment, so the reorganization is seen as a move to boost competitiveness and create shareholder value.
Alibaba founder Jack Ma has also made a rare public appearance in China after several months abroad. Ma, who stepped down as head of the group in 2019 to focus on philanthropic activities, has kept a low profile for the past two and a half years following public criticism of the Chinese regulator. Every piece of information about the billionaire and his moves has been heavily commented on on Chinese social networks since his retirement from the media in 2020.